SOME S.D. CHARTERS RECEIVED MILLIONS IN PPP LOANS

Charter schools are collecting millions of dollars in federal paycheck protection loans, even though they are not expected to lose state funding, federal data shows.

Like all California public schools, charter schools — which operate independently of school districts — were told they will be spared state budget cuts last school year and this year.

Unlike district public schools, charter schools are allowed to apply for the federal Paycheck Protection Program, or PPP, which is meant to help keep small businesses and nonprofits from laying off their staff.

At least 22 San Diego County charter schools or charter school organizations have collected at least $23 million from the Paycheck Protection Program, according to a Union-tribune analysis of U.S. Treasury data.

Some of those loan awards are controversial.

At least $15 million of PPP loans went to Inspire charter schools, a statewide group of home-schooling charters with San Diego locations that is being audited by the

state for potential fraud. Its founder and former CEO was found to have taken $1 million in payroll advances, an auditor said.

The Inspire District Office, which collects fees from Inspire schools and for years provided most of the schools’ services, also received a PPP loan of at least $1 million.

Another $23 million or so went to 12 corporations — all with the same address — that are part of the statewide Learn4life charter school network. Learn4life, which has locations in San Diego, serves at-risk and disadvantaged high school students with independent study programs and learning centers.

Last year Learn4life was ordered to shut down some locations for violating a state law restricting where charters can locate learning centers. The CEO of Learn4life’s parent corporation, Lifelong Learning Administration, was paid $390,000 in one year, according to 2018 tax records.

Recently teachers at Gompers Preparatory Academy protested after that southeast San Diego charter school received a $2.3 million PPP loan in May, on top of $408,000 in federal CARES Act funding, and then it laid off more than a third of its teachers in early June.

PPP loans can be forgiven only if a business or nonprofit keeps or rehires its staff. Gompers announced on July 7 that it has rescinded the layoffs.

California charter schools can apply for PPP loans because they are nonprofits. School districts don’t qualify because they are government entities.

Some critics argue that it’s unfair for charter schools to claim this federal aid while continuing to receive the same amount of state revenue as before the pandemic.

Clare Crawford, a senior policy analyst for In the Public Interest, said the Paycheck Protection Program was meant for small businesses and nonprofits in danger of laying off employees. Many charter schools and school districts also received other COVID-19 relief money from state and federal governments.

“They’re essentially receiving two pots of money for the same purpose,” Crawford said of charter schools.

“Some of these chains are really getting quite a lot of money .... For some of these bigger ones in particular ... is this really needed?”

Charter school leaders say that PPP is needed to help many schools weather increased costs from the pandemic. They point out that virtual and home-based charter schools were excluded from receiving some COVID-19 school funding in this year’s state budget.

“I don’t understand the argument that this is not meant for charter schools, which ... in California, all charter schools are nonprofit public schools,” said Luis Vizcaino, spokesman for the California Charter Schools Association.

Vizcaino also disputed the idea that charter schools are taking money needed by small businesses. He pointed out that, as of mid-june, about $130 billion was left over in the Paycheck Protection Program.

“To suggest that a small business is not getting a loan because charter schools are receiving a loan is completely misleading and unsubstantiated,” he said.

Most of San Diego County’s more than 130 charter schools either did not apply to the program or did not receive loans of $150,000 or more. The Treasury Department did not release specifics about loans that were smaller than $150,000.

Charter supporters argue that the extra aid is needed especially for charter schools that are expecting hundreds or thousands of new students this fall but won’t get new state funding to serve them.

Krystin Demofonte, principal of the Inspire school Pacific Coast Academy based in Poway, said her school needs PPP money so it can afford to serve an incoming swell of new students.

“[Pacific Coast Academy] is experiencing an even bigger budget crisis than most traditional schools due to the pandemic, as we are experiencing a dramatic surge in students as families recognize the value of our highquality distance learning program,” Demofonte said in an email.

“[Pacific Coast Academy] is facing budget cuts deeper than most schools due to the recently adopted unfair and unprecedented no-growth 20-21 budget that will penalize high quality, growing schools like ours.”

Inspire students are largely home-schooled and meet with a teacher once a month. They are allotted enrichment funds each year to pay for recreation, field trips and other activities.

Charter school proponents like Demofonte say the new state budget is punishing nontraditional charter schools like Pacific Coast Academy for offering a distance learning program that many families want in the midst of the pandemic.

The state budget for this current school year does not increase school funding, even if a charter school or district’s enrollment increases.

That is different from normal. Traditionally state money has followed the student, so charter schools and districts get some state funding based on the number of students who attend.

Pacific Coast Academy received a $3 million PPP loan, while another local Inspire school, Cabrillo Point Academy, based in Poway, received $4 million, according to board agendas. Both schools are authorized and overseen by the Dehesa School District in San Diego County.

Learn4life charter schools spokeswoman Ann Abajian said in an email that Learn4life schools were not eligible for and did not receive any federal CARES Act funding. Nor were they eligible for low-interest loans that traditional schools often use.

Even though they are not traditional brick-and-mortar schools, Learn4life schools have seen increased costs due to COVID-19, Abajian said, including buying laptops and Wi-fi hotspots for students, many of whom are from low-income families. About 85 percent lacked internet access or computers at the onset of the pandemic, she said.

“We sought PPP loans to protect our teachers, counselors and tutors, so they could keep students engaged and not falling backwards into the dropout cycle,” Abajian said.